Examination of witnesses (Questions 220
WEDNESDAY 27 JANUARY 1999
and MR JIM
220. Then let us ask you, because you are
the best sort of person, what can we do to increase the number
of seafarers? Tell me, does this Maritime London you have been
talking about feel any responsibility towards increasing the number
of British seafarers?
(Mr McCoy) I think the answer is very matter of
fact. If you are going to increase the number of seafarers the
environment has to be there for people to buy ships first. I think
it comes that way round.
221. You are not saying "we do not
need to train them because we do not have many shipowners",
(Mr McCoy) No, I am putting the emphasis the other
way around. I am really saying that if the environment in London
or under British registries was favourable so that over a period
of time, and I think that is what it takes, tonnage starts to
re-accumulate under the registry then I think training will follow.
I do not think that because you have a bank of merchant seamen
that people go out and buy ships. That is a very simple statement.
In terms of our own responsibility, because our business is reliant
upon international trade I do not think our members feel a responsibility
but of course we do something because we want to support this.
Jim Buckley has some figures on what we at the Baltic have contributed
and I would like him to tell you, with your permission.
(Mr Buckley) Thank you, Chairman. We have traditionally
supported training either directly through the Lloyd's Officer
Cadet Scheme and through bursaries at maritime universities, we
have three in operation at the moment, for the training of
223. Wait a minute, three bursaries?
(Mr Buckley) At maritime universities.
224. We are not talking about three students,
(Mr Buckley) No, we are talking about three bursaries.
We have also earmarked some money for the new Maritime Training
225. So how many people is that overall?
(Mr Buckley) We are talking about £30,000
226. Mr Buckley, you are not answering my
question. How many students are we talking about?
(Mr Buckley) The Lloyd's Officer Cadet is one
and the bursaries are very small but they are spread by the universities
amongst a number of students. It is a handful. In addition, our
members do some training themselves and they support students
through the Institute of Chartered Ship Brokers.
227. How many of your members do that training?
(Mr Buckley) I do not have those figures.
228. So it is not something really that
is ever discussed?
(Mr Buckley) No, it is a modest contribution.
229. Do you think it could be more or that
it should be more?
(Mr Buckley) I think it goes back to the first
part of the question, what is our responsibility? We use a small
number of trained seafarers in our business and I think the response
we have made in terms of financial commitment, which is the only
way we can do it as an institution, is appropriate to that level.
230. What percentage of your staff come
(Mr Buckley) The percentage of the Exchange itself
or ship brokers?
231. In your employment.
(Mr Buckley) Actually of the Exchange itself?
(Mr Buckley) I have one who comes from abroad.
233. There is a difference, we are not talking
(Mr Buckley) We are talking about an institution
based in the City. If you are talking about ship broking more
generally about a third of people employed by Baltic members are
from other nations and there are 45 different nations involved.
The highest numbers are Greeks followed by Danes and then there
are 43 other countries.
234. That would flow from your national
(Mr Buckley) Indeed it would, yes.
235. I want to bring you on to something
different. I want to bring you to the point you made about Singapore
and Vancouver and the benefits that they bring. Do you want to
tell us a bit about that?
(Mr McCoy) Yes, please. Can I just make a very
general remark on Singapore because interestingly we had the Minister
of Singapore in our office last week asking us
236. A very sharp fellow.
(Mr McCoy) Yes, we thought he was a very sharp
fellow. He must have thought that we were fairly simple because
he was asking us how he could create a London market in Singapore
and whilst we are very friendly we decided not to do that. Can
I just make three very quick distinctions in terms of these enterprise
centres because it is a very important aspect to understand. We
have open registries like Liberia, Malta and Cyprus who are essentially
flags of convenience where the ship has almost no link with the
country other than what goes on to the stern of the ship. We then
have the parallel registries where there is a link between the
second registry and the country. I think Norway has been a very
good example of this where there is a tangible link: low tax regime
and ships go from one register to the other. The Norwegian Open
Register now is about 28 million tonnes. Then we have what are
really enterprise zones. Vancouver and Singapore have been two
very good examples and if I may I could add a third one which
is Shanghai. The Shanghai-ese have been flattering, they have
actually built a mini Baltic Exchange in Shanghai which I visited.
We did not actually tell them that our own trading side is becoming
redundant, the marketplace, the way of trading, so actually I
think they have built a very handsome white elephant in a sense.
237. Oh dear, you will remember that we
are taking a record here. The Chinese have a long habit of reading.
(Mr McCoy) The important thing about the two areas
you have specifically mentioned is that both have offered to shipowners
and operators and brokers a tax-free period, and in both cases
I think it has been ten years. Jim has a record of what Singapore
offered if you are interested in hearing it. Both of these were
enterprise tax-free zones for maritime activities. The Singapore
registry has reacted dramatically, it has gone up to about 28
million tonnes. The Minister of Communications was keen that he
added on the services that are so boasted by London and I guess
they are going to come slowly. Singapore in a sense is gathering
momentum and will be successful as an entrepreneurial hub in the
Far East. Vancouver has withered on the vine and the reason it
has withered on the vine is it is in the wrong time zone, it is
in the wrong country and it has not been a place where shipowners
could go to register ships and operate from successfully bearing
in mind it is ten hours away from London, the main marine market
of the world. Our experience of Vancouver is that the Canadian
Government were very welcoming to foreign nationals, particularly
the Chinese coming out of a place like Hong Kong, but in fact
it has not worked. But, by the same token, Singapore is working
and will be a strong competitor for us in the future.
238. Because it is in fact in exactly the
position that you talk about.
(Mr McCoy) Exactly.
239. It is in the right time zone, it has
very welcoming habits and it is going to learn from other people's
experience. Tell us about the ring-fenced tonnage taxwhat
is your view?
(Mr McCoy) I think the shipowners are better able
to answer this question, so I will just give a very quick bullet
reply. This type of taxation of shipping is of course very commonplace.
One of the earlier contributors talked about Greece. Greece has
got a dead simple system and a huge fleet. They charge $1 per
deadweight, so I think this, if successful, would be a benefit
to the UK registry. I cannot quantify it because I have no way
of doing it, but I would imagine it is inevitable that the UK
registry would benefit from it. I think I would add one point
from my own experience, which is that it takes time. Some shipowners
will make up their mind very quickly and there has been an example
given this afternoon, but I think over a period of time, if you
are trying to attract ships into the British registry which do
not exist under British ownership, and of course there is a very
large amount that does, then I think this takes time to see how
it works, whether it is a stable regime, whether there is a catch
in it. People are very canny and I think a lot of this tonnage
would be moving from what is really a tax-free environment to
another one with a lower tax and people will need to weigh that
up. In short, I would welcome the measure. I think it will enhance
the British fleet and if it enhances the British fleet, it will
add to some of our business which, as I explained in our opening
statement, is very small.